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Many people are concerned that after the US presidential election, the global stock market will experience a sharp pullback, especially in the week before the election, the four major US stock indexes have experienced a huge recoil. Investors will inevitably have some concerns, but in fact, put Factors aside, judging by the big data, the probability of rising and falling after the US presidential election. In the last 40 years, the probability that US stocks rise on the 20th day after the election is actually as high as 70%.
This chart can clearly see that on the 20th day before the election, due to market uncertainties, the probability of US stocks rising and falling is basically equal to each other, and the trading volume will be significantly reduced. This is reasonable, and the winner is confirmed on the 10th day after the election. At this time, the market will first assimilate the new policies and new industry trends. Most passive funds will also begin to adjust their investment portfolios. It is reasonable that there are sporadic adjustments in selling pressure. Right now, the probability that US stocks will rise is around 40%. On the 20th, everything that should be sold in the market is sold, and the adjustment of the selling pressure is almost over. The funds will begin to shift to new policy and stock topics with brilliant fundamentals. At this time, the biggest factor of uncertainty, the result of the general election, is also It has been lifted and the power to buy funds will be much greater than before the elections, so the probability that it will rise is as high as the 70%.
Before these general elections, although the world stock market has suffered important corrections, the most representative VIX (panic index) did not continue to rise, after the VIX rebounded on 10/28, it began to return on 10/30. This shows that the market is not as pessimistic as expected, otherwise VIX safe haven purchases will not only have this degree of increase.
Before and after these general elections, it will be an excellent time to deploy high-quality action. Since, under normal circumstances, it is the intensive announcement period for the third quarter earnings and October earnings, as long as the quarterly and monthly reports are significantly better than market expectations, Stock prices will react in anticipation, But this time the presidential elections are stalled, legal entity institutions and life insurance funds will not enter the market for the first time due to risk considerations. This means that as long as the third quarter and October earnings are excellent Based on market expectations, it is not that it will not rise, but rather that the rise will be delayed until after the election. Therefore, it will be a good opportunity for ordinary investors. It is recommended that the base period is not high and the financial report is significantly better than expected, but the stock price “But not up”, go ahead and plan ahead. After all, after the election, the global stock market will face a blank window of issues. At this time, the funds will begin to choose the most fundamental fundamentals.
(The author of this article is Zhong Kunzhen, analyst at Moore Investment Consulting)
※ Disclaimer: This article is the opinion of the author, does not represent the position of this website, nor is it any investment advice or reference. Please make your own judgment and assess the risk.
(Zhongshi News Network)
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